The concept of wealth and reach illustrated by Evans and Wurster in “Blown to Bits” (1999) has been an important contribution to our understanding of Internet business strategy.
This is the argument in a nutshell:
The information economy and the economy of physical things fundamentally differ from each other. When a tangible good is sold, the seller no longer owns it. When an idea, software, or research paper is sold, the seller still owns it and could possibly sell it one more time.
Information can be replicated at no noticeable cost and can be distributed over the Internet at very low cost. Aside from information, tangible assets are location-based and often wear out.
In the traditional economy of things, products are subject to a universal law: the balance between wealth and scope. Because the information is embedded in the products in a physical mode of delivery, companies can choose to have a very “rich” product or have a lot of “reach”, that is, have a wide audience, either in terms of reach geographic or breadth of customer orientation. groups. The meaning of “wealth” may vary depending on the context; for example, a scientific research publication or a highly sophisticated stereo is rich in information. Scientific research work has a very small audience in a given location, while sophisticated stereo will be very specific and expensive. Hence its “range” is low.
Internet arrives. The more soluble the package of tangible products and information becomes, the more obsolete the trade-off between richness and reach becomes. Therefore, a good corporate internet strategy will add wealth and reach to the existing business strategy at the same time.
In the case of digital or fully digitizable products, there is no balance between wealth and reach. We can add as much wealth as we want and still have a global reach. A very “rich” business can be described as very specific. In fact, for the business of a new website on the Internet it is necessary to be very “rich”, that is, to be very “specialized”.
The more specific the topic or theme of a website, the more specific the visitors coming to the website from search engines will be. On the one hand, it will be easier to be on top of the search engines with very ‘rich’ niche content, on the other hand, whatever the income model of the website, the conversion rate will be higher as it increases. the traffic. managed. Because “reach” is on the Internet and is only subject to language limitation, we have to truly excel in “wealth” in our online businesses.
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